ABC26GN4209 · Compound Interest
Subject: General Aptitude · Chapter: Compound Interest · Exam: · Marks: · Difficulty:
What is the difference between the compound interests on ₹ 5000 for 1 year at 4% per annum
Answer
SELF-PRACTICE — the source book printed no answer.
Nothing is invented here, so this question has no answer on record.
Explanation
Interest compounded half yearly $=5000\left(1+\frac{2}{100}\right)^{2}$ $$\begin{aligned} & =5000\left(\frac{102}{100}\right)^{2} \\ & =5000(1.02)^{2} . \end{aligned}$$ As we know $\mathrm{A}=P\left(1+\frac{R}{100}\right)^{t}$ Interest compounded yearly $=5000\left(1+\frac{4}{100}\right)^{1}$ $$=5000\left(\frac{104}{100}\right)=5000(1.04)$$ From (i) and (ii) Required difference $=5000(1.02)^{2}-5000(1.04)^{1}$ $$\begin{aligned} & =5000(1.0404)-5000(1.04) \\ & =5202-5200=₹ 2 \end{aligned}$$
Explanation as extracted from the printed page; notation may be imperfect.
Open in whiteboard · Browse this chapter in the app